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VIR-news
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| BP reaching for target |
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The operator of the $1.3-billion Nam Con Son gas project, British Petroleum (BP) Vietnam, said the company had not planned to reduce production this year at either Lan Tay or Nam Con Son pipelines as the first year’s gas deliveries had not reached annual targets.
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New power plants opening this year should raise demand for gas |
Gas sales from Block 06.1 were reported at 800 million cubic metres by the end of last year, 53 per cent of its 1.5 billion cubic metre schedule, due to low demand from local consumers. However, BP said it expected gas volume to pick up quickly when some major power plants were opened this year.
BP Vietnam director general Mary Shafer Malicki said the commercial operation of the Phu My 3 power plant by the end of this month would make a crucial final step towards completing the full value chain of the gas project.
Phu My 3 power plant, in which BP, Singapore company Sembcop and Japan’s Kyushu Electric hold equal stakes, will use 840 million cubic metres per year to feed the plant with a capacity of 716 megawatts, almost 10 per cent of the current total capacity of all power plants in Vietnam.
Phu My 1 is also expected to convert to use Nam Con Son gas in May and Phu My 4 will operate by the end of 2004. The two power plants, backed by Electricity of Vietnam, are expected to consume a combined volume of 2.2 billion cubic metres per year.
“While gas output has been lower than desired, our system reliability has been excellent,” Nam Con Son pipeline project director, Do Ba Canh, said.
“Our ability to deliver gas to customers reliably will be key in building customer confidence and will help further development of the market,” he said.
Gas from Block 06.1 is currently supplied to the two power plants, Phu My 2.1 and Phu My 2.1 Extension. BP said that with a substantial increase in gas demand from the three power plants this year the company would fulfil its target for gas deliveries for 2004.
Under the Gas Supply Agreement, the state oil and gas giant PetroVietnam, the sole gas trader, agreed to buy 2.1 billion cubic metres of gas in the first year, 2003, with the volume to increase to 2.3 billion cubic metres in following years.
The commitment implied that if PetroVietnam did not consume the amount of gas specified in the contract it would have to store the excess. A surplus would mean the production capacity of the field would have to be reduced.
The Nam Con Son project, in Ba Ria-Vung Tau province, is the country’s largest foreign-invested project to date.
BP is the major foreign partner in the project, with significant stakes in its three developments: the Lan Tay and Lan Do gas fields, the Phu Mu 3 power plant and the 400km pipeline that supplies gas to Phu My 3 and the two other power plants.
The Lan Tay and Lan Do gas field development project has invested capital of $508 million. BP has a 35-per-cent stake in the venture, India’s ONGC has a 45-per-cent stake and PetroVietnam’s stake is 20 per cent. The Lan Do field is not operational yet. The project is expected to earn a total profit of $200 million a year.
Nam Con Son’s two gas fields are capable of producing about 3 billion cubic metres per year and are expected to sustain commercial productivity levels for 20 years.
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By Minh Ngoc
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